CCK urged to review connectivity fees

February 7, 2011

, NAIROBI, Kenya Feb 7 – The Communications Commission of Kenya (CCK) is being challenged to review and clearly define interconnection charges between mobile operators in an effort of stabilising the market.

Telkom Kenya Chief Executive Officer Mickael Ghossein said on Monday the regulator had failed to set termination rates between telephone service providers, leaving operators to implement their own rates.

Mr Ghossein said this had led to the current vicious price war in the telecoms market, which he says threatens to destroy the market.

"I am against it and if I could I will oppose it because.  I believe it kills the market. Today we see a big problem of sustainability of the business and we are starting to feel it," he said.

Interconnection charges are tariffs that telephone companies pay to other network providers for calls or SMS terminating outside their networks.

The Telkom boss said clearer definition of termination rates by the CCK rather than leaving it for operator interpretation would lead to a more competitive operating environment.

The CCK has been reviewing the interconnection charges, which is currently pegged at Sh2.21 with talk of lowering it further.

While the CCK appears to prefer market forces to determine prices, it has also attempted to guide market prices by offering recommended ceilings for service charges.

This has paved the way for some operators to fix lower prices in an effort of attracting customers. In January, Airtel Kenya introduced a Sh1 three-month promotion for its customers, way below the recommended Sh2.21.

Mr Ghossein said the current price wars were hurting the company adding a number of costs saving measure would have to be adopted if the operator was to remain competitive.

"Today unfortunately, the sector is in bad shape and I think we are destroying the value of this market. I think the biggest impact will be felt by our employees if nothing is done to take care of the market," he said.

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